5 Situations a Reverse Mortgage is a Good Idea
Category: Estates | Inheritances
With rising home prices, homeowners may find themselves feeling pretty wealthy. But when it comes to the retirement years, being house rich and cash poor can cause significant issues with covering expenses. It’s times like these that a reverse mortgage may be a good option. If you’re considering taking out a reverse mortgage, here are five instances it might be a good idea.
1. When you’re committed to living in your home during retirement
One of the requirements for eligibility for a reverse mortgage is that you live in your home as the primary residence at least six months out of the year. If you’re committed to being in your home for your retirement years, it could make sense to use a reverse mortgage to help with cash flow. As long as you don’t sell your home or move, you won’t need to pay a dime toward the mortgage or principal.
2. When you need extra cash flow to cover daily expenses
Sometimes retirement revenue sources, like savings, Registered Retirement Savings Plan (RRSP), Canada Pension Plan (CPP), and Old Age Security (OAS), simply aren’t enough. Since reverse mortgage loans are issued tax-free, they won’t have any bearing on how much you can receive from government entitlement plans. In addition, the flexibility of a reverse mortgage means you can choose to receive regular monthly payments that can act as an ongoing source of income during retirement.
3. When your credit score doesn’t qualify you for other types of loans
4. When you need to pay for an emergency and don’t want to tap investments that are doing well
5. When you want to give an early inheritance to your children
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See the original article here: https://www.digitaljournal.com/pr/5-situations-a-reverse-mortgage-is-a-good-idea
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